Buying solid gold is a cleaver way of investing and holding gold. Over the past six thousand years gold has been regarded as a form of money and store of wealth. The use of gold has far outshined the alternatives for a number of reasons including its scarcity, brilliance, softness and resistance to rust.
Since the end of the gold standard, gold has largely lost its role as a form of currency, but is still considered by many, including some of the world’s most important central banks, as a store of great wealth and a safe haven in times of calamity. Gold along with other precious metals are seen as unique assets in that they are real value and liquid specimens, unlike some other assets like property which is real but not liquid, or company shares which are liquid but not real, its only paper.
The unique and useful properties of gold, as well as its rarity and increasing demand, make it an attractive commodity investment. Gold is known as the “crisis commodity” because during periods of political, social, or financial disaster, the price of gold tends to rise in response to the same factors which cause other investments to fall.
And gold does preserve a special position in the market with many tax regimes. For example, in the UK the trading of gold is free from taxes.
When currencies have failed or economies collapsed, gold throughout history, has maintained its bargaining power. It is hardly possible that it will ever lose all its value, unlike stocks whose value can be wiped out in short order if one or more of the numerous risks associated with them turns badly.
Buying Bullion bars is initially the most cost effective entry into the physical gold market. They can be purchased in various weights from as low as one troy ounce and up. But be sure to buy from an established dealer that provides a written certificate of weight and gold content.
As gold is a soft metal it is safe for the bars to be sealed in clear plastic protector to prevent any accidental damage or wear causing a loss in weight or identification. Most investors are not fond of keeping their bars at home so annual storage and insurance costs must be taken into account. Many will make their investment by opening an account on line with an authorized gold depository where purchases are kept in a secure vault and can be traded as easily as stocks.
If the purpose of buying is to take physical possession of the gold, then renting a safety deposit box is an answer. Also do not forget to check out the tax implications in your jurisdiction before deciding on investing in bullion bars.
For gold bullion coins currently or recently minted, that are issued by various countries, there is a possibility of getting a simple entry into the ownership of gold. Typically bullion coins are priced according to their weight, with little or no premium above the gold price.They come in a range of sizes from as low as 1/10th of an ounce to one ounce. The prices fluctuate throughout the day in line with spot gold prices and expect to pay up to a 5% premium. The coins are easy to purchase on line and can be shipped to your door by secure delivery. They are easier to store at home, can be traded at local coin dealers or online and as they age, may increase in value as they become of interest to collectors.
There is less likelihood of any adverse tax problems associated with trading in bullion coins on a limited level as they are likely to be considered as a private transaction but to be safe check before purchasing. Not to be confused with commemorative or numismatic coins.
Collectors gold coins include pre 1933 government issues. These coins trade on a highly specialized market where the spot price of gold is not the only factor to consider. 1933 was the year when President Roosevelt made holding gold coins illegal and ordered all US citizens to return them to the US Treasury where they were melted into gold bullion bars, hence the rarity. Note that while it is an unlikely possibility that there would be another gold confiscation order issued by the US or any other major government it has happened before and could happen again.
If your goal is simply to capitalize on price movement, then bullion coins will serve your purposes. If you are interested in long-term asset preservation and you have additional concerns about capital or monetary controls, then you might want to include the lower premium variety of pre-1933 European and American gold coins in the mix. These have been treated by the U.S. government since the 1930s as historical items, and, as a result, afford the privacy-minded investor a greater degree of safety than gold bullion.
If you want to protect yourself against inflation, deflation, stock market weakness and potential currency problems, to hedge financial uncertainties, there is only one portfolio item that will serve you in all seasons and under most circumstances; gold coins and bullion bars.
Now is a great time to invest in gold. The price is expected to continue to rise, with no clear limit in sight. As a hedge against inflation, as a store of value, as a liquid asset, and as a stable core in a diversified portfolio, gold is unmatched.
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Article Source: Physical Gold Investments
